National Grid fined £4.3m over slow gas leak responses

National Grid Gas has been fined £4.3m and Northern Gas Networks (NGN) fined
£900,000 by energy regulator Ofgem for failing to attend to gas leaks on
time.

The companies both blamed last year's exceptionally harsh winter conditions for their failure to meet the targets, which require them to attend 97pc of uncontrolled gas leaks within an hour and 97pc of controlled gas leaks within two hours.Photo: Alamy

The companies both blamed last year's exceptionally harsh winter conditions for their failure to meet the targets, which require them to attend 97pc of uncontrolled gas leaks within an hour and 97pc of controlled gas leaks within two hours.

In its worst-performing area in 2010/11, the North West, National Grid reached only 92.1pc of uncontrolled leaks on time. In the West Midlands, East of England and London, its rates were between 95.2pc and 96.1pc.

Its response to controlled leaks - ones that had already been brought under control by a customer after advice on the phone - fell short in the North West and East of England.

NGN, which serves north Cumbria, the North East and much of Yorkshire, reached 91.6pc of uncontrolled gas leaks and 94.3pc of controlled leaks on time.

Rachel Fletcher, Ofgem's Senior Partner for Distribution, said: "Consumers pay for these important service standards and have a right to expect that they will be met.

Today's announcement sends a clear message to energy network companies that they risk a financial penalty from Ofgem if they don't meet their obligations."

The fines represent the first time that Ofgem's rules on time limits for attending gas leaks have been broken. Nobody is believed to have been hurt as a result of any of the slow responses.

Ms Fletcher added: "Ofgem accepts that many parts of Britain experienced bad weather conditions over the last year and individual members of staff from NGN and NGG worked hard in difficult conditions to reach customers that reported gas escapes.

"However, both companies need to plan better for bad weather and ensure that adequate resources and contingency plans are in place to meet the annual targets."

John Pettigrew, COO of National Grid's gas distribution business, said: "Last winter was one of the harshest seen in this country for many years, and our teams worked extremely hard in difficult conditions. We missed our target and told Ofgem as soon as we knew this would be the case."

The company said it has learned lessons from last year and implemented improved plans for this winter, including an extra 200 engineers in place and more 4x4 vehicles and snow tyres.

The £4.3m fine means that National Grid's gas business has now been subject to the three highest fines ever levied by Ofgem, following a £15.8m fine in 2010 for abusing its market position and an £8m fine earlier this year for failing to provide accurate information to Ofgem.

Mark Horsley, NGN's chief executive, said: "Winter 2010/11 severely tested our network and we would like to apologise to anyone who was adversely affected but also take this opportunity to reassure our customers that we have taken action.

"Despite the fine imposed, the regulator has praised the dedication shown by our engineers, support teams and contractors. They showed immense dedication in responding to an unprecedented number of gas escapes during the worst winter to affect our region for more than 100 years."

NGN said it had also conducted a thorough review and put a new plan in place for this winter, including an increased number of engineers and 4x4 vehicles.

Ofgem said that the companies had both complied fully with their investigation and agreed to settle the matter, and would have faced higher fines had they not taken action to improve their plans.